Market Timing For Beginners
If you are a beginner and an amateur in the world of mutual fund trading, it is advised for you to start with small amounts of money.
Even professionals and people with years of experience go wrong while trying to make a calculated risk. Marketing timing is nothing but the attempt to predict or guess the future movements of the stock prices using technical and analytical tools. It is often perceived that the predictions made are nothing but shots in the dark and are said to be fluke. Nothing can be farther from the truth.
Most market timers work on the policy of buying when the stock is low and selling when the stock is on its way up. Many market timers look to make a number of small profits by changing their positions every few minutes than waiting for longer periods in the hope of making a profit. However, there are market timers who operate on longer timeline but there is more risk involved here as the insiders feel that the stock market cannot really be predicted over a longer period of time.
Movies and books show a rosy picture of people just buying some shares and its prices skyrocketing. Surely it happens, but only in fairytales. The amount of study and research involved is often not seen. So, if you want to try your hand at market timing, be sure you have done your homework thoroughly.
The key behind this strategy is reviewing the price and volume action of the major market indexes each day. The indexes you need to follow are the S&P 500, the Dow Jones Industrial Average, the NASDAQ and the New York Stock Exchange Composite index. What you are looking for is whether or not the index increased in price or decreased in price from the prior session.
Trading in stocks on the stock market is typically driven by speculation, based on company news and performance factors. There are two ways to try and find the market value of a stock. Stock value is determined using some type of cash flow, sales or earnings analysis. This form of stock valuation is based on historic ratios and statistics and aims to assign market value to a stock based on measurable attributes. Most financial advisors will recommend against any attempts to time the market. It can't be done, they will tell you, and I agree. Timing the market or specifically identifying market tops or bottoms as opportunities to buy or sell is usually a futile effort. What financial advisors fail to tell you, however, is that market awareness is important and should be a factor in your investing decisions and strategies.
Article Source: FxTradingStock.com
About the Author
Want to find out more about Market Timing, then visit Arthur McCain's site. http://market-timing.org
by: Arthur McCain
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Date: Wed, 14 Jul 2010
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